WHAT IS LETTER OF UNDERTAKING UNDER GST?

December 17, 2021
MSAadmin

According to the Notification no. 37/2017 Central Tax, any registered person who intends to supply goods /services to outside India or units covered under SEZ (Special Economic Zone) or developer of SEZ without payment of integrated tax (IGST) is required to furnish Letter of Undertaking (LUT) in FORM GST RFD-11. The following types of persons registered under GST will be allowed to submit a letter of undertaking and undertake export transactions.

Eligibility criteria for registered dealers to apply for LUT?

Any person registered under goods and service tax, who intends to supply goods /services to outside India or units covered under SEZ ( Special Economic Zone ) without payment of integrated tax is eligible for applying LUT provided below mentioned condition is satisfied.

  • The person has not been prosecuted under the Central Goods & service Tax Act, 2017 (12 of 2017) or the Integrated Goods and Service tax Act 2017 (13 of 2017) or under any of the existing laws in case where the amount of tax evaded exceeds 250 lakh rupees.

  • The Letter of Undertaking shall be furnished on the letterhead of the registered person, in duplicate, for a financial year in the annexure to FORM GST RFD – 11 referred to in sub-rule (1) of rule 96A of the Central Goods and Services Tax Rules, 2017 and it shall be executed by the working partner, the Managing Director or the Company Secretary or the proprietor or by a person duly authorized by such working partner or Board of Directors of such company or proprietor.

  • Where the registered person fails to pay the tax due along with interest, as specified under sub-rule (1) of rule 96A of Central Goods and Services Tax Rules, 2017, within the period mentioned in clause (a) or clause (b) of the said sub-rule, the facility of export without payment of integrated tax will be deemed to have been withdrawn and if the amount mentioned in the said sub-rule is paid, the facility of export without payment of integrated tax shall be restored.

If the exporter fails to export goods/services or receive payment for exports within the stipulated period prescribed by the government, and does not pay the IGST within 15 days from such prescribed period, the facility of export without payment of IGST will be withdrawn till the time the tax paid.

Now hope you understand the provision related to Letter of Undertaking with respect to export of goods/services, if you have any queries, please contact us.

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